Correlation Between Sungchang Autotech and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and SEOJEON ELECTRIC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sungchang Autotech and SEOJEON ELECTRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Sungchang Autotech and SEOJEON ELECTRIC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sungchang Autotech with a short position of SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and SEOJEON ELECTRIC.
Diversification Opportunities for Sungchang Autotech and SEOJEON ELECTRIC
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungchang and SEOJEON is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC and Sungchang Autotech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sungchang Autotech Co are associated (or correlated) with SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Sungchang Autotech and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to under-perform the SEOJEON ELECTRIC. But the stock apears to be less risky and, when comparing its historical volatility, Sungchang Autotech Co is 1.86 times less risky than SEOJEON ELECTRIC. The stock trades about -0.05 of its potential returns per unit of risk. The SEOJEON ELECTRIC MACHINERY is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 407,000 in SEOJEON ELECTRIC MACHINERY on October 14, 2024 and sell it today you would earn a total of 4,000 from holding SEOJEON ELECTRIC MACHINERY or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Sungchang Autotech |
| SEOJEON ELECTRIC MAC |
Sungchang Autotech and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and SEOJEON ELECTRIC
The main advantage of trading using opposite Sungchang Autotech and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, SEOJEON ELECTRIC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Sungchang Autotech vs. Wireless Power Amplifier | Sungchang Autotech vs. NewFlex Technology Co | Sungchang Autotech vs. Woori Technology | Sungchang Autotech vs. Bosung Power Technology |
| SEOJEON ELECTRIC vs. Sungchang Autotech Co | SEOJEON ELECTRIC vs. Techwing | SEOJEON ELECTRIC vs. A Tech Solution Co | SEOJEON ELECTRIC vs. Narae Nanotech Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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